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Choice Under Constraint: Total Quantity

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Consuming 1 lb bananas and 0 lbs of apples & oranges each. Choose: Oranges: 120 100 = 100 ... and 1 lb of oranges, or 1 lb of apples, oranges and bananas ... – PowerPoint PPT presentation

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Title: Choice Under Constraint: Total Quantity


1
Choice Under Constraint Total Quantity
Marginal Utilities of Consumption
You can get 3 lbs total of anything you want.
What would you choose?
2
Constraint Total Quantity. First Pound
Marginal Utilities of Consumption
Choosing the first pound Which would give you
the highest marginal utility?
Choose Bananas 150 120 100
Relevant Marginal Utilities
3
Constraint Total Quantity. Second Pound
Marginal Utilities of Consumption
Choosing the second pound Consuming 1 lb bananas
and 0 lbs of apples oranges each
Choose Oranges 120 100 100
Relevant Marginal Utilities
4
Constraint Total Quantity. Third Pound
Marginal Utilities of Consumption
Choosing the first pound Consuming 1 lb of
bananas and oranges each, and 0 lbs of apples
Choose Apples or Bananas 100 100 90
Final Selection either 2 lbs bananas and 1 lb of
oranges, or 1 lb of apples, oranges and bananas
Relevant Marginal Utilities
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